Finance forum: Mutual funds 52 articles - 68.382 readings

Mutual funds are financial products that pool the savings of a large number of investors. They’re usually administered by asset management companies, such as capital management companies, or by individuals authorised to trade in the financial markets. The total capital is reinvested to guarantee a return for those subscribed to these mutual funds. The investments are made on the basis of certain risk profiles and specific diversification strategies. Follow me

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What are the advantages and disadvantages of target-date funds?

Mutual funds

During the ‘Market Mover’ programme of the ‘Sole 24 Ore’, Marzia Redaelli discussed the topic of target-date bond funds. What are target-date investment funds and what are some of their advantages? These funds invest in a portfolio of bonds and have a maturity date at which investors can withdraw their capital. Some of the advantages are a) investing in a fund with a well-defined time horizon; b) being able to exploit the diversification potential of a fund that invests ...

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Active funds or ETFs? The word from the experts

Mutual funds

Active funds or ETFs? Let's take a closer look at the comparison in the opinion of some professional investors. Mutual funds and ETFs It is a well-known comparison between active mutual funds and ETFs. As Steve Garmhausen (‘Barron's’) writes, active funds have the potential to beat the benchmark, but they cost more; passive funds, on the other hand, have lower prices and greater transparency (they are also sometimes more tax-efficient), but they have the drawback not only o ...

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Investment funds and stock market indices that surprised

Mutual funds

The magazine ‘FONDS Professionell’ recently published the results of its investment fund barometer. What are some of the most significant results? Excellent results for funds investing in China The fund barometer of ‘FONDS Professionell’ magazine indicates that September was not a month of market contraction, but rather of slight growth (+1.8%). Some sectors performed decidedly better than others; this was the case in China, where there was a ‘spectacular’ t ...

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Equity mutual funds lose the challenge to S&P 500 index funds

Mutual funds

Some data from the US indicate that a large proportion of active mutual funds are failing to keep up with the performance of ETFs indexed to the S&P 500. SPIVA's results (S&P Indexed Vs. Active) Active funds are finding it increasingly difficult to beat passive funds, the ETFs. In ‘La Stampa’, Glauco Maggi reported the data of the SPIVA (S&P Indexed Vs. Assets) analysis. The result is that in 2023 only 40 per cent of active US equity funds managed to beat funds inde ...

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37% of active funds do not reach ten years: what is the problem?

Mutual funds

Some data show that fewer and fewer actively managed funds reach a ten-year lifespan: but why is this happening? Fewer and fewer active investment funds are reaching the ten-year mark Fewer and fewer funds are reaching the ten-year mark. This is shown by a study of the Boston Consulting Group also reported in the magazine ‘FONDS Professionell’. In 2010, the share of funds reaching ten years of age was 60 per cent, while in 2015 it dropped to 42 per cent and in 2023 to 37 per cent. ...

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Active funds: how can they outperform ETFs today?

Mutual funds

Looking at some of the data (e.g. Morningstar fund inflows), it is clear that passive funds have become increasingly popular with investors in recent years. But what are the strengths of actively managed funds? Two advantages of ETFs: cost and transparency As Monika Calay, head of passive strategies research at Morningstar, explains in an interview with Sunniva Kolostyak on the same portal. Calay mentions cost as the first reason, as passive funds are known to replicate market indices and thus ...

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Inflows still on the rise for equity and bond funds, but outflows in money markets

Mutual funds

Morningstar has published data on European fund inflows for February. The results show an overall increase of €19.4 billion. Bond fund results However, the inflow data, which Antje Schiffler writes about for Moringstar, is very mixed, both in terms of the asset class considered and the type of management (active or passive). In the case of the bond market, inflows amounted to just under €31 billion, with a clear preponderance for actively managed funds, which attracted just under &eu ...

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Liquid alternative funds (hedge funds light): what are they and how much do investors like them?

Mutual funds

How do liquid alternative funds work? Is investor interest in them growing or waning? Liquid Alternative Investment Funds Liquid alternative investment funds (sometimes referred to as hedge fund light) are mutual funds, investment trusts or ETFs that invest (a) in alternative asset classes such as futures, real estate assets or leveraged loans and/or (b) in equities and bonds, but using strategies typical of alternative investments. Differences with hedge funds However, these funds differ fr ...

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When is it worth getting out of an investment fund?

Mutual funds

Is there a point in time (and associated signs) when it makes sense to consider having your share in an investment fund liquidated ahead of time? Beware of impulsive decisions As Anna Bahney writes on 'CNN', quoting financial advisor and planner Eric Gabor, selling your share in a mutual fund should always be a planned transaction and never an impulsive decision caused by a market crash, for example. The temptation to exit a fund can also arise if the fund is consistently making losses ...

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